News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Bullish
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Singapore stock market saw institutional money inflow for 4 weeks in a row, with S$ 329 million pumping in last week. Fund manager's top picks include banks, aviation, real estate and entertainment stocks - SGX data https://t.co/OuYnUxbCaG https://t.co/oA3F7M24sV
  • Forex Update: As of 03:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.30% 🇦🇺AUD: 0.28% 🇪🇺EUR: 0.27% 🇨🇦CAD: 0.25% 🇨🇭CHF: 0.22% 🇯🇵JPY: -0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/cvhJ5cA6PH
  • Heads Up:🇦🇺 RBA Interest Rate Decision due at 03:30 GMT (15min) Expected: 0.10% Previous: 0.1% https://www.dailyfx.com/economic-calendar#2020-12-01
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 94.24%, while traders in NZD/USD are at opposite extremes with 73.51%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/CgvQhYDWbr
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/xwtE3mUyHw
  • Japanese Finance Minister Aso says overall the financial system is stable - BBG
  • Join @DanielGMoss's #Webinar at 10:00 PM ET/3:00 AM GMT for his weekly coverage of trading prep for $AUDUSD in the week ahead. Register here: https://t.co/wi1qabrtHJ https://t.co/jNyYJ2yATp
  • South Korean President Moon Jae-in: - Revised GDP shows swift economic recovery underway - Retail investors have supported the South Korean stocks markets - BBG
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/mAKl7spDmH
  • Wall Street Futures Update: Dow Jones (+0.513%) S&P 500 (+0.628%) Nasdaq 100 (+0.755%) [delayed] -BBG
Crude Oil at Major Inflection Point as USDOLLAR Breaks Down

Crude Oil at Major Inflection Point as USDOLLAR Breaks Down

2016-04-12 11:29:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- Crude Oil (CFD: USOIL) challenging its 200-DMA again; flag points towards $51.00/brl.

- USD/CAD nears significant support around C$1.2830.

- As market volatility rises, it's a good time to review risk management principles.

With the USDOLLAR Index's breakdown gathering pace, a number of other widely watched instruments are exhibiting behavior indicative of a potential broad turning point in global markets. A stable Japanese Yen and softer US Dollar have given renewed vigor to the commodity bloc; and it seems that further gains in the space are contingent upon more stability in the Japanese Yen and weakness in the US Dollar.

Whereas Gold (CFD: XAU/USD) and Silver have been exhibiting signs of developing longer-term bottoms, today Crude Oil comes into focus as it nears a major inflection point: its 200-DMA (now at $40.62/brl). Crude Oil has tested its 200-DMA three times since the breakdown in July 2014, back in June and October 2015, and again in March 2016 (chart below).

Chart 1: Crude Oil Daily Chart (July 2015 to April 2016)

Crude Oil at Major Inflection Point as USDOLLAR Breaks Down

If Crude Oil is able to clear its 200-DMA this week, we'd have the most significant piece of technical evidence to date that an important short-term low has been established. Concurrently, as explained in the above video, the measured move for the recent flag that may be forming below the 200-DMA, if validated, would call for an extended run towards $51.00/brl. That would certainly fly in the face of conventional wisdom.

Chart 2: USD/CAD Daily Chart (August 2015 to April 2016)

Crude Oil at Major Inflection Point as USDOLLAR Breaks Down

For USD/CAD (chart above), which has been enjoying the ride with Crude Oil, it seems too coincidental that Crude Oil is at major resistance while the pair itself sits at recent swing lows near C$1.2830 (established in October 2015 and March 2016). While the Canadian Dollar has been strong in its own right, it seems that it may need a further push here.

Considering that the recent breakdown in the USDOLLAR Index has gone hand-in-hand with the Crude Oil rally, it's not a stretch to suggest that a legitimate USD/CAD breakdown through C$1.2830 is contingent upon Crude Oil clearing its 200-DMA.

See the above video for trade implications and technical considerations in SPX500, USD/CAD, GBP/USD, Crude Oil, EUR/USD, Gold, Silver, and the USDOLLAR Index.

Read more: USDOLLAR Back to Support as Gold, Global Equities Try to Rally

If you haven't yet, read the Q2'16 Euro Forecast, "EUR/USD Stuck in No-Man’s Land Headed into Q2’16; Don’t Discount ’Brexit’," as well as the rest of all of DailyFX's Q2'16 quarterly forecasts.

--- Written by Christopher Vecchio, Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

To be added to Christopher's e-mail distribution list, please fill out this form

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES